GBP / USD falls to fresh daily lows around 1.2920 amid widespread USD strength

  • GBP / USD is back around 220 pips from daily highs amid a strong rally in USD demand.
  • The uncertainty of the US political environment forces investors to take refuge in the safe haven USD.

The pair GBP/USD maintains its strong sales tone at the start of the European session on Wednesday and falls to new daily lows, around the 1.2920 region in the last hour.

The pair extended this week’s good recovery move, from near 1.2850, and spiked to nearly two-week highs during the early part of Wednesday’s trading action. However, the initial positive movement faded quite quickly and the GBP / USD pair witnessed a sharp turn from the 1.3140 region.

The first results of the US elections showed that the race to the White House is closer than expected. In addition, the news indicated that there will be a delay in the results of key battlefield states such as Wisconsin, Michigan and Pennsylvania. The uncertainty has forced investors to hedge their positions and has driven some aggressive money flows towards the US dollar.

Apart from this, a sharp intraday decline in US stock index futures it has provided an additional boost to the safe haven US dollar. The global risk sentiment has been affected in reaction to the comments of President Donald Trump, saying that they will go to the Supreme Court and that the voting be stopped. The comments fueled concern that the result will be questioned.

The market focus will continue to be on US political development, which along with broader market risk sentiment, will continue to influence USD price dynamics and infuse some volatility in GBP / USD. .

Credits: Forex Street

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